Is Entering Sweepstakes a Hobby? Can It be a Job?
I consider myself a fairly serious "sweeper" - or enterer of sweepstakes and contests (mostly online.) In the past, I've won a trip, cash, a bike, massages, electronics, and just recently -- an iPad2! I would definitely agree that the time spent entering has been well worth it, and people have suggested that I do it full time as a career. But is this even possible?
As I explained in more detail in a post over at personal finance blog Wise Bread, there is much work involved in turning your contest entries into winning entries. It's not something you do once, only when you feel like it, and without any system or organization. The more serious entrants know that it can take months (or even years) for that big win, and some people never win anything big at all -- only small wins that can take up space in your closet and not enrich your life much, at all.
Ask yourself these few questions before considering an investment of more time in entering giveaways:
1. Do you have the time? You may have 5 minutes to enter the most winnable or those with the best prizes. You may not have 30 minutes to an hour each day -- especially if you already work and have kids. Don't set yourself up for an expectation of winning thousands in prizes each month if you don't have a spare second to try for them. You'll only end up feeling guilty for taking more time away from your responsibilities.
2. Do you have a system? Picking and choosing random promotions with no idea of what you've entered -- and when -- isn't just inefficient, it can actually backfire. Entering a one-time only promotion more than once, for example, will get you disqualified, turning that hard work into a waste for you and the sponsor.
3. Do you need the prizes? We could all use a new car. No one really needs 2 dozen branded stress balls or a giant poster of the chemical composition of a hot dog. Prizes range from the useful to the ridiculous, and if your life is already full of clutter (both physical and mental), skip promotions that offer nothing more than the thrill of winning. We all like to feel good, but not at the cost of your time and several plastic tubs full of crap.
4. Can you afford to win? The responsibility of paying taxes on a prize is yours, and yours alone. If you win anything valued at over $600 in a tax year, you will likely receive a 1099-misc with the value of your prize winnings entered for you to claim as income. (Note: you are responsible for prize values under $600, as well. You just won't get a form for them.)
Unlike regular 1099 income, you will not have to pay social security or medicaid taxes on this amount. However, it may not be feasible for you to win something that you can't convert to cash and then have to pay the taxes one. (The HGTV dream home, for example, would have to be sold to cover your tax liability. It's just that huge.) Don't ever enter for prizes that could put you in the poor house by winning -- unless you can sell it, get a cash equivalent, or feel like the taxes are worth it. (A trip that is worth $10,000, but only puts you back $1-2K in taxes, for example, is a great deal for some.) If you are unsure as to what the liability will be, contact your tax attorney.
5. What pays the bills? I loved that I won an all-expenses paid trip to San Francisco with my husband not long after we were married. We enjoyed the weather, the entertainment, and the time alone. I would gladly accept a free trips every year as a way to unwind and experience places that I couldn't afford otherwise. This, however, does not make me a "professional" sweepstaker. My electric bill could care less about my trip winnings, and the kids' new shoes can't be paid for with free airline peanuts. Unless you're winning bundles of cash and gifts that can be sold on Ebay or Craiglist, your dreams of living off of your prizes alone is misguided.
Here is the truth:
Just like the recent craze of extreme couponers that have delivered a false and often damaging hope of getting everything for nothing to today's moms, the practice of entering giveaways has the potential to, as well. Your life may very well be enriched by winning, and if you are interested in getting started, I suggest trying out some blog giveaways to get your feet wet. You will not, however, be able to trade in your 9-5 job for the dreamy world of free cars and cruises.
It just doesn't work that way.